A large group of employees at the National Nuclear Security Administration can expect to come under a trial pay-for-performance system beginning in January 2008, officials said at a public hearing Wednesday.

The demonstration project will encompass more than 2,000 employees across every major headquarters and field organization of NNSA, which is a semi-autonomous agency within the Energy Department.

Office of Personnel Management officials said at the hearing that they will strongly consider comments from employees and members of the public before rolling out the project. Though the event -- intended to gather feedback -- had a low turnout, OPM Associate Director Kevin Mahoney said several employees, unions and others had submitted testimony for the record.

The project aims to compress the 15 pay grades under the General Schedule system into multigrade paybands. The process would eliminate the fixed steps that give automatic pay raises to employees, and would make annual pay adjustments performance-sensitive.

The paybands will be determined based on previous recruitment and promotion patterns and existing grade distributions. Each of the agency's four different career paths -- professional, administrative, technician and nuclear materials courier -- will include different paybands that are reflective of past recruitment and promotion patterns within those occupations, according to a notice from the hearing.

Conversion to the new system will depend on an employee's current job series and position title. Workers will be briefed about payband placement this summer, the notice said.

The project will be modeled in part on the controversial National Security Personnel System being developed by the Defense Department. NSPS has been criticized by labor unions and some lawmakers who argue that it effectively eliminates the collective bargaining rights of employees. A union lawsuit over NSPS is currently under appeal.

Tom Stevens, an engineer in NNSA's Las Vegas facility, noted concern with a departure from the NSPS system, however, arguing that one benefit of NSPS is that it still provides cost-of-living adjustments to employees based on inflation rather than performance ratings.

Though NNSA employees who receive a rating below "fully meets expectations" would still receive the adjustment based on inflation, the underlying rate of an employee's basic pay would be reduced to ensure the total rate of pay does not increase. "This could be an unintended consequence of your system," Stevens said at the hearing Wednesday.

NNSA and OPM say they will proceed with caution, arguing that the project should be seen as a "modest attempt" to improve the current system while preserving its merit-based virtues and employee protections. "It should be clear from a careful reading of NNSA's proposal that our purposes, design and approaches are not so radical as to deny and denigrate the merit principles that underlie the traditional civil service system," the notice said.

The National Treasury Employees Union submitted comments to OPM on March 30, expressing disappointment in the project. "Taken as a whole, the proposed system fails to advance the public's interest in protecting nuclear security," NTEU wrote.

The union said it objects to the demonstration project "in its entirety," arguing that there is "dismal" evidence that pay for performance has worked in other agencies, such as the Homeland Security and Defense departments. "The proposed system lacks transparency, credibility and fairness, as it is not set by statute and is subjective, which will lead to at least the appearance of favoritism," the union wrote.

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